When clicking on starting equity in the BS I get a display of line items showing a starting balance with no description and then a sales invoice with no description
These are correctly displayed as outstanding invoices but where is the description. The account has no starting balance. I have a start date but have not entered starting balances.
Is this correct or is there something I have missed?
The sales invoices do have descriptions
Thanks
Gally
You have not given enough information to understand the problem. Show more of the screen so we can see what tab you are in and what list you are viewing.
Also, post screen shots of a couple of the entries so we can see what they are. Click on edit and capture the screen. In particular, show one of the sales invoices. Normally, sales invoices should not be contributing to starting balance equity. Nor should both debit and credit columns be empty for any line.
What account are you referring to?
They are sales invoices dated October 2016 and appearing as a credit item on 1/1/17
This is how it appears in
The invoice was issued last year and is still unpaid by the customer so they are starting equity as far as we are concerned.
This is how it appear5s in starting equity one line item for the invoice value which can be edited and viewed
and another line that cannot be viewed and when edited just shows sale invoice opening balance = 0
Not sure if we are doing something wrong in handing unpaid invoices at year end.
No this part is correct. What you haven’t done is enter an Equity Starting Balance which offsets them.
Currently you are showing screenshots from the Starting Balance Equity account, this account shouldn’t have a balance if all the Starting Balances have been entered.
Or put it this way, you have entered a Debit (Accounts Receivable balance) but you haven’t yet entered a Credit (offsetting balance), so until you do that Manager compensates with the Starting Balance Equity account as a way to highlight that.
So I suggest that you complete “I have a start date but have not entered starting balances” first and then lets review it.
PS: the screenshots in your last post are normal.
I am starting a new set of accounts in Manager for the 2017 accounting year.
I have three 2016 sales invoices two paid in Jan 2017 and one still outstanding.
I have set up a 2016 pending receipt in Dec 2016 - is this correct? There is no part payment in 2016 for this invoice and the opening balances are zero.
I have four 2016 purchase invoices. For these I have set an opening balance of the invoice value in manager. Payment receipts in January refer to the 2016 invoices. Is this correct?
the starting balances show the purchase invoices with credit and debit amounts.
the paid sales invoices do not show in starting balances.
the unpaid pending receipt shows a credit in starting balances for the invoice amount is this correct.
This is an extract of starting balances is this configured correctly?
I am not sure what I need to enter for unpaid 2016 sales an purchase invoices.
thanks
Why ?
You do not need to start a new set of accounts for 2017, just change within the Summary tab - Set Period dates to be “From” Jan 1 2017
Sorry not new, a first set, there is no 2016 accounts other than what I thought the items I needed to enter.
When I tried to enter starting balances for suppliers Manager told me I needed to enter purchase invoices individually. This is what they are,
First, I have the same question as @Brucanna: why start new new accounts for 2017? Do you mean you are beginning to use Manager in 2017 for a business that was ongoing previously? Based on questions you have posted previously, I assume that is true. The remainder of my comments are based on that assumption. (Your answer on this came through while I was typing.)
For sales invoices with balances due on your start date, no starting balance entries are made in any account. Instead, the sales invoices are entered with their original, pre-2017 issue dates. This establishes the starting balance for Accounts reeivable. Manager will ignore these transactions for other purposes. Read this Guide: https://www.manager.io/guides/7226.
You do not enter any receipt as Pending for these sales invoices, because as of your start date, no receipt exists. You enter a receipt as of the date your customer pays. The Pending status refers only to whether the receipt has cleared at the bank. Since you say two receipts date from January 2017, these have presumably cleared and should be edited to show a Cleared status. Since the third sales invoice remains unpaid, nothing should be entered for it.
The 2016 purchase invoices would be entered only if you have not paid them as of our start date. This establishes your Accounts payable starting balance. Enter payments when you pay them. Read this Guide: https://www.manager.io/guides/7227.
I don’t know what you mean by this. A starting balance is a single number. Are you, by chance, referring to a drill-down on Starting balance equity?
No. See above.
No. See previous answers.
I have re-read your guides and set no starting balance for all unpaid invoices.
The figures for AR at £140 and AP at £1501.5 are correct as are other BS starting balances as advance payments and members standing Order balances of £948
But still do not understand the starting equity on the starting balances balances report. I would expect it to be £305.53 not ( £1195.57)
It looks like the 2016 purchase invoices and the bank transaction shown for 1/1/17 are both debits on this report?
I know I am missing something but not sure what.
Your meaning is not clear, because you cannot set starting balances for invoices, only for accounts. So what exactly do you mean by this?
Why? The balance in the account is the net of all debits and credits, as shown in your screen shot. The arithmetic is correct. Where did you get your 305.53 number, and why do you think that should be the amount for Starting balance equity? If you believe 1195.97 is wrong, that can only be because one of the contributing transactions is wrong.
Yes. A purchase invoice increases Accounts payable, a liability account. Payment of a purchase invoice decreases a bank or cash account, both asset accounts. So both of these should be credits, and they are. If you don’t understand debits and credits, read the section about them in this Guide: https://www.manager.io/guides/8965. It covers when they increase or decrease various types of accounts.
I agree that I do not understand credits and debits. However I am trying to understand the starting balances report.
I can only create a purchase order for 2016 and look at what your starting balances reports. In this case it is a debit item.
I then record a payment in 2017 against the purchase invoice and look at the standing order balances and its shows another debit item.
This is what I do not understand.
If I set a starting balance for the 2016 purchase order to offset the 2017 payment then that would fix the problem as it create a credit value on the starting balances account. This is what I do not understand… Is this something I need to do as well when entering a 2016 purchase invoice followed by its 2017 payment?
The credit and debits are surely a matter for how Manager handles the transactions and I agree it would help if I did understand these things but I don’t.
If you could just tell else I might I need to do to.
What should the starting balances be?
Thanks
Then post a screenshot of that report so we can see what you see.
When you enter the starting balances, you also need to enter a balancing starting balance under a Balance Sheet - Equity account - so all starting balance debits & credits balance.
So at this stage just focus on getting the starting balances balanced, don’t do any 2017 transactions as that will just confuse matters.
So if your AP is 140 and the AP is 1501.50, then your Equity starting balance is 1361.50 debit.
If you have other starting balances then the Equity starting balance will vary by those amounts.
So once the Summary tab Balance Sheet Equity section doesn’t have a “Starting Balance Equity” account, then you are balanced.
I’m sorry if you think I’m bringing up debits and credits to confuse you. But one of the things you asked about–or seemed to–was credits on what you called the “starting balances balances report.” The screen shot you showed was of a drill-down on the Starting balances equity account balance from the Summary page, not the Starting Balances report (which is in the Reports tab). Despite your terminology, I addressed your question on the assumption you were referring to credits in the drill-down, explaining why they are credits and where you can find out more about the subject.
I assume you actually mean a purchase invoice, not a purchase order, as a purchase order will have no effect on financials. But you previously said this was a credit, which agrees with your drill-down report. Now you are saying it is a debit. If it is now a debit, you’ve done something besides what you described.
This, too, was a credit before and has become a debit without explanation.
As I explained before, you cannot set starting balances on transactions. So no, not only do you not need to do this, but you cannot do this. If you think you can, you must be referring to something else. Since we cannot see your records or watch what you do, it is very important to use the same terminology as in the program.
That’s why I referred you to the link. Every single thing Manager does depends on debits and credits. And until you understand the fundamentals of them, you will never understand what Manager is doing. You have to understand the objective before you can learn to use any tool.
The sum of assets must equal the sum of liabilities and equity. Every transaction must balance debits and credits. If you enter something incorrectly, Manager is going to take over and make those things true, even though the result is incorrect. The way the program does that is to activate the Starting balance equity account and dump the incorrect transaction there. You may have had a real equity balance on January 1, 2017, but it should have been contained in Capital accounts, or Owner’s equity, or Issued shares, or something similar, depending on your form of legal organization. One of those account might have a starting balance. Then the program would not have intervened and activated Starting balance equity. So I believe what this really goes back to is an incompletely designed chart of accounts.
@Brucanna is right: sort out the balance sheet as of January 1, 2017. Then worry about 2017 transactions. And forget the idea that you are entering or should enter anything in 2016 to “offset” something that happened later in 2017. That’s not what you’re trying to do. You are trying to make your books reflect the position of your organization on January 1 when you started using Manager. After that is in hand, you can record transactions that change that position over the ensuing year.
@Gally, going back to the beginning it appears that you are transferring from an accounting system (even if its spreadsheet based) to Manager, so the first exercise is to get Manger’s opening Balance Sheet to be a replica of the other systems closing Balance Sheet.
From what you have shown above I have deduced you have the following as at Jan 1 2017:
Accounts Receivable - 3 unpaid invoices being 35 + 35 + 70 totalling 140
Accounts Payable - 5 unpaid invoice being 30 + 30 + 205 + 216 + 1020.50 totalling 1501.50
Bank Account - 2 being Lloyds with 2515.03 and Nationwide with 12694.33
Members balances - 948
Reserves (?) - 3 being M&R Fund with 2000, Tercentenary with 5000 and General with 5694.33
What hasn’t been shown is any accumulated Retained Earning but suspect it could be your expected 305.53.
So the draft trial balance would be this 
These now get entered as Starting Balances (making positioning assumptions) to get the report:
And the Jan 1 Balance Sheet as:
NOTE - No Starting Balances Equity account exists
PS - As to your initial comment “Starting Equity descriptions missing”, that is normal as Starting Equity transactions shouldn’t exist - it just a depositary for incomplete / incorrect transactions until they are corrected.
I have made several comments in this and a related thread about equity structure. They are all valid, but may not apply in your case, @Gally. @Brucanna’s illustrations above include only the default Retained earnings account. That account represents the net of income, expenses, dividends, capital contributions, etc., etc., that have not yet been assigned elsewhere. In the case of a charitable organization like yours, the absence of any other equity accounts may be completely appropriate. Perhaps no one ever made an investment in the organization. All funds over the years may have been developed through current operations, donations, etc.
My point in saying this is that you should not feel your chart of accounts is deficient because you lack other equity accounts. Your accountant can pass judgement on that and guides you towards any remedy deemed necessary. The fact remains that Retained earnings is an equity account; that may be all the equity structure required.
You are correct we only need brought forward reserves and general funds in the equity account. Thee are not liabilities but sums built up over many years.
One thing is still bugging me about starting balances from the previous year.
I have created purchase orders for 2016 a required. I have found that I need to create a credit for each supplier otherwise I get a starting balances account created.
I assume this is because the money is still in our bank account and the 2017 payment removes this credit and the reduces the bank balance.
Likewise for each sales invoice the money is not in the bank and I do not need to anything. The resulting receipt just decreases the accounts receivable.
So hopefully this is correct and all my figures are as expected.
Unfortunately I am working backwards from this year as last years accounts are in a mess but I thank you for helping me get this sorted,
My starting balances report now shows no accounts payable and accounts receivable as the one unpaid sales invoice which I think is how it should be. But I did need to add starting credit balances to supplier accounts.
Please let me know if this is not correct.
many thanks for the time you have given me, do you have a charity we could make as donation to you to help others.
Assuming you actually have money to back these “reserves and general funds,” such amounts might belong in an equity account. They sound like they were generated through ongoing operations and donations, and as such could be a part of Retained earnings, set up as a starting balance in that account. But if you want to keep track of them separately, having them in equity accounts named appropriately would also be acceptable. Set those funds up with starting balances, too.
Remember, Assets = Liabilities + Equity. So forgetting everything else, if you had 10,000 in a bank account starting balance and 10,000 in Reserves starting balance, your opening balance sheet would be correct.
You should have no purchase orders. First, they have no financial impact, even if dated after the start date. What you should have entered is unpaid purchase invoices. Big difference. If those purchase invoices were unpaid as of the start date, they would create the starting balance in Accounts payable. That is correct if you owed someone money as of the start date. Accounts payable is a credit account, but you should not be creating credits in any other way unless you have an unassociated credit from a supplier (which you have never mentioned in any way) as of the start date.
If you entered purchase invoices correctly, this would be true. The 2017 payment credits your bank account and debits Accounts payable.
True.
My personal recommendation is not to try working backwards. If you do that, you are reversing everything you’ve done with starting balances. Maybe you weren’t really referring to recreating last year’s accounting records, but only figuring out what your starting position was for Manager. That would be OK. But if you’re going to try to replicate 2016 in Manager, then your start date has to be moved earlier and all your other starting balances will change.
Nope. All support on the forum is free. Financial transactions between or on behalf of forum members are a violation of the forum’s rules. Sooner or later, you’ll become proficient enough to help out some new user.
You have just made me really happy. Sorry about the slip re purchase orders I did mean invoices. I am not trying to recreate 2016 accounts just getting starting balances synchronised with what I know about last years accounts.
The donation would be to the people who write, supply and distribute the software making it freely available to people like me. I do not need a cloud account but willing to male a donation to them to help others.
We have many lodges in the UK and everyone has a treasurer, I am hoping to create a handbook of my experiences and help others to get started with manager, we all have similar problems. It is often the little things that experienced people take for granted that the inexperienced do not know.
So thank you once again
